Apart from manufacturing, China’s apparel export industry also faced significant challenges resulting from recent international trade disputes and increasing production costs. China’s clothing export value and global share have continuously dropped in the past years. In the meantime, several rising apparel manufacturing counties in Southeast Asia started to threaten China’s leading position. Furthermore, the coronavirus pandemic outbreak in 2020 battered China’s clothing export industry and caused a year-on-year loss of more than eight percent.
Giving consideration to such factors, China’s garment enterprises sought new opportunities from the domestic market. Owing to the growing disposable income, the average expenditure on clothes and shoes in China surged over the past two decades. Also, Chinese consumer’s willingness to buy domestic brands increased substantially. According to a survey conducted in 2020, nearly 70 percent of Chinese consumers preferred domestic clothing brands to foreign ones.
Adding to the ever-increasing demand for fashion, the prevalence of online shopping also boosted China’s apparel retailing sector. In 2019, more than one-third of the apparel sold in China was via online retail platforms. To improve consumers’ online shopping experience, Chinese apparel retailers have invested in innovative technologies. In spring 2020, China’s online retail leader Alibaba rolled out its first virtual dressing room. Consumers could virtually try on more than 600 pieces of luxury items. According to Statista’s Digital Market Outlook on the apparel industry, by the end of 2023, around 58 percent of China’s market revenue will be generated through online sales, well ahead of the global average of 24 percent.